Slashdot videos: Now with more Slashdot!

View

Discuss

Share

We've improved Slashdot's video section; now you can view our video interviews, product close-ups and site visits with all the usual Slashdot options to comment, share, etc. No more walled garden! It's a work in progress -- we hope you'll check it out (Learn more about the recent updates).

kaychoro writes to mention that at least one privately held bank is planning on removing a little bit more legwork for the consumer by allowing the electronic submission of paper checks via a new iPhone app. The app would allow users to take a picture of the front and back of the check and submit that to the depository. "Customers will not have to mail the check to the bank later; the deposit will be handled entirely electronically, and the bank suggests voiding the check and filing or discarding it. But to reduce the potential for fraud, only customers who are eligible for credit and have some type of insurance through USAA will be permitted to use the deposit feature. Mr. Peacock said that about 60 percent of the bank's customers qualify."

Funnily enough, a few years ago I had something published in an Australian magazine. They offered to pay me by wiring the currency direct to my account. "Amazing," I thought. "Why don't more U.S. businesses operate this way?" They were paying me something in the neighborhood of $200 USD, and they said they would do the deposit in USD for me, so I wouldn't get screwed by any kind of exchange-rate shenanigans. But lo and behold, once the "currency" reached the U.S. "border," Citibank (which isn't even my bank

Doing financial business in bits and bytes is ridiculously simple and easy, the cost is nearly nill, the banks are just robbing folks as usual. I worked for several years in a Global Funds Transfer department for a huge bank. GFT technology is OLD OLD OLD, think like telegraph/fax old, that is why it works to anywhere, in Mexico, or say Nigeria, or that little village in Tanzania. You just got screwed because the big banks OWN all the wires, and they have divided up the playing field so they seem to compete but don't really do so...

If you don't have 12 paper cheques around here, you can't get a lease. Need them to set up direct deposit of your pay, need them to set up direct deposit for your health insurance, need them for all sorts of things.

In the UK for paying larger organisations regularly (possibly a varying amount) we use "Direct Debit". You put your bank account number on the form, post it to the company. The company takes the agreed amount of money on the agreed date. If there are any problems you can ask the bank to reverse it (and the company will e.g. send a paper bill). You can stop the payments at any time.It's the normal system for paying a phone bill, electricity, TV, membership fees, charity donations, etc.

Renters generally still pay their rent with checks. That and the occasional random bill from a service company that you get through the mail. Checks still have their place, although I generally pay everything online these days.

That and the occasional random bill from a service company that you get through the mail.

Skilled tradesmen generally like to get a check in their hands immediately after their work is complete.

Often, a cash discount is available, depending on their level of fear of the IRS (the old fashioned scam, I usually charge $100 but if you let me write up a receipt for $50, I'll take $75 cash, and we'll both be happy and call it even, mm kay?)

I know of several times that I've been forced to produce a canceled check, either to prove I paid something or to prove how much was paid. Most banks now just take pictures of the checks anyway. I have to pay an extra fee to get the canceled checks back from the bank. My wife is an accountant so she is predisposed to having a paper trail.

Everyone you do business with isn't likely to have a credit card machine handy. When I was taking flying lessons for example the instructor (just a local CFI who taught in his spare time) nor the aircraft owner I rented from (an 80+ year old man who rented out his plane for instruction to get a bit of extra income) could take a credit/debit card, but they took cash or checks just fine. Since toting around the check book still beat cash, checks it was.

DTE energy here in Michigan charges you a FEE to pay electronically. I send the scumbags a paper check. They cant charge me more legally to pay that way, and it costs them more than accepting my electronic payment.

it's that a lot of major companies are ran by idiots and morons that are either afraid of change or ragingly greedy and like to rape their customers at any turn.

In your country, do contractors and repair people carry plastic card terminals around with them?

No, they hand you a bill with a giro attached to it. You then either add your account number to the debit side of the giro, sign it and take it (or mail it) to your bank, or pay electronically to the account number listed on the credit side of the giro.

In either case, there's no artificial "hold" time (which is a lame excuse for excessive float) -- the recipient gets the money immediately, as the transfer is ini

The giro system is still superior to cheques / drafts -- it's a "push" system instead of a "pull", and for that reason a lot less prone to fraud. Typical check-fraud strategies don't work with giro, because the transfer is initiated from the payor's side, not the payee's.

It's unfortunate that the US never transitioned over to the giro system, but my understanding is that it's something that occurred in Europe post-war, when they had an opportunity to change things around that the US never got. Cheques and drafts are an older concept.

Just because both systems involve paper doesn't mean they're in any way equal. Nor does it mean that an electronic system would be, just for being electronic, superior to one or both: it's quite easy, actually, to make an electronic system that's less secure and more prone to fraud than a paper-based one. I'd much rather see a paper-based giro system in the US than an electronic version of the "pull"-based check, where anyone can suck money out of your account using nothing but the ABA routing and account numbers.

In your country, do contractors and repair people carry plastic card terminals around with them?

No, you get the bill and pay with giro [wikipedia.org]. These are almost exclusively handled electronically these days - although earlier mailing them in was common. Or delivering them to the bank. Cheques haven't been used here in Norway since the early eighties. Some delivery services (packages, pizza,...) have portable terminals, though.

Indeed. It's all a bit strange in the US. If you owe someone money you have to write a cheque. Apparently procedures arr so lax though that by having the account number and routing code, people can empty your bank account.

There doesn't seem to be any reasonable way for ordinary bank customers to transfer money to customers of other banks. So in the UK with faster payments now in place at most banks, you can send money to someone else's account alost instantly. In the US, you write a cheque, put it in the post and wait. Then the recipient gets it and sits on it for a few weeks/months until they get to the bank and deposit it. In the meantime, you have to keep track of outstanding cheques in case someone sits on it for several months then sends you overdrawn.

For most other functions, US banks ahve done a pretty reasonable job of getting things automated and electronic. Given the high cost of processing cheques, I'm at a complete loss as to why they still exist let alone are in day to day use.

Checks are still a good way for two individuals to exchange money. Neither the payer or the payee has to pay any service fees (something you can't say for credit card or debit card payments) and there is some protection for the buyer (something you can't say for cash - you can't tell your bank to stop payment on a $20 bill).

Anyway, many banks in the US do allow you to transfer money electronically to accounts at other banks, but many of them charge fees for outgoing transfers. Electronic transfers to othe

Checks are still a good way for two individuals to exchange money. Neither the payer or the payee has to pay any service fees...

Well, that seems to be changing in some cases. In recent months, my wife has attempted to cash personal checks at the bank from which they were drawn. Since she does not also have an account there, they not only charge her a $1.50USD fee, but they insist on taking her thumbprint! It's definitely eliminated that bank from future services. Way to alienate your potential customers -- soak them with fees and make them feel like a criminal. Nice!

I believe that you can thank the FDIC "Know your customer" program for the hassle to which you refer. Prior to the 2001-09-11 destruction of the World Trade Center in New York, attempts to put the "Know your customer" program in place were being soundly rejected by the banks due to their effects on privacy. This program, by requiring all banks to somehow "know" everyone with whom they do business, and to report to the government any "suspicious" or "unusual" activity, acts to get information in to the gov

Canada is in the same boat. It is very annoying. I have corporate account and a personal account. To pay myself I have to write a cheque, to me, from the corporate account and deposit the cheque into my personal account via ATM then wait 2 days for it to clear.

I use President's Choice Financial for my personal account, and I can add accounts at other institutions to my account list. This allows me to transfer money between accounts (even between different institutions) with zero fees. Transfers between institutions take a day to clear.

There doesn't seem to be any reasonable way for ordinary bank customers to transfer money to customers of other banks

Really? That sound insane. Here in Danmark I can just walk down to the ATM enter a target account and transfer the money that way(It's even free I think). It will even print a slip, with the transfer details so I can prove that I did transfer money.

Or I could use this fancy new internet bank thing, which allow me to view all my accounts, and transfer money to anyone with a bank account in EU. And it's all free(Well atleast internal in denmark, it might cost a bit to transfer to other countries), because its

My bank here has a link to a number of companies many of which are companies that I have bills with. I can put in a "bill" to my bank and it will retrieve the bill and when I prompt the system to do so it will submit a payment electronically, free of charge. It might take a couple days, but it takes less than a check in the mail. If the company I send the payment to doesn't have a link to my bank, my system automatically simply cuts a paper check for me.

Almost every customer bill in the UK is paid by Direct Debit. The organisation automatically draws the money straight from your bank account. I know some firms in the US will do this, but the UK version has some important safeguards, absent from the US system.

For variable amounts, (like your electricity bill) the organisation has to give you fourteen days notice before making the deduction from your account.

You can cancel the Direct Debit at any time.

Banks vet organisations heavily before they are allowed to initiate Direct Debits. I've been through this process, and it is quite a thorough auditing.

Customers are protected by the Direct Debit Guarantee [bacs.co.uk]. Every bank that allows customers to have Direct Debits has to adhere to this. In effect it says if the organisation made a mistake, debiting the wrong amount, or on the wrong date, you tell the bank and the bank will immediately refund the money plus any charges incurred as a result, recouping from the company.

It's this guarantee that has made it so successful, for customers who don't have to worry about making payments, it all happens automatically. And for companies the big advantage is cost. To collect a direct debit costs pennies and the system can be entirely automated. The savings in bank charges are substantial and in staff time are enourmous.

If you move to a different bank, you need to sign one form and all your direct debits should be moved to your new account. You don't need to contact any of your suppliers.

These are fairly important differences. In the UK, I had direct debits set up for all my bills but since moving to the States, I pay all my bills manually even though I'm occasionally late and incur late fees. Basically when you set up automatic payments here, you're giving the company full access to your account and if they overcharge or empty your account, the bank is under no obligation to rectify the situation and there's no real mechanism in place to "Cancel" the access. It's a potential nightmare.

Of course it wouldn't send you overdrawn if you did your recording properly in the first place. All things being all electronic facilitates is faster fraud and screwups. At least with a system that still has a bit of slinkyness to it you can catch big errors before they bankrupt a company.

I use Bank of America's online banking system, which has a facility for electronic payment of bills. As a result, I don't write checks for any of my monthly bills anymore (which essentially means I don't use checks at all).

Bank of America will allow you to set up any mailing address for automatic payment, so I can even use it to pay my landlord (who doesn't have his own arrangement with the bank like most utilities do). The caveat is that it takes 5-7 days for the payment to be processed into his account, b

Then let me ask how you would handle the following situation (one of the few in which I use checks):

* I have a friend who watches my son during the day.* I need to pay this person every two weeks.* I need proof that I've paid this person for a given time period so no disputes arise.* Being as this person only watches my child (apart from hers) she is not a "business" per se and thus doesn't accept credit cards.

I am honestly not being snarky or combative, but if checks are truly a thing of the past in some p

* I have a friend who watches my son during the day.* I need to pay this person every two weeks.* I need proof that I've paid this person for a given time period so no disputes arise.* Being as this person only watches my child (apart from hers) she is not a "business" per se and thus doesn't accept credit cards.

I am honestly not being snarky or combative, but if checks are truly a thing of the past in some places I would like to see what they've been replaced with.

This isn't very complicated. Signed receipt. I, the undersigned, aka "AdamWeeden's Friend", acknowledge than I received $20 cash on date X for baby sitting little AdamWeeden Jr. for the two week period of Y to Z. "AdamWeedens friend" signs the receipt, you keep the receipt in your file cabinet.

A signed hash file of a receipt would probably work just as well, although they are obviously opening themselves to a known plaintext attack.

Technically, the IRS would be interested in this transaction, but in prac

Over here (Europe) I'd just tell my bank (electronically) to transfer some amount from my account to hers. Banks don't charge you for that here. Actually, since this is a recurring payment I'd set it up once as a recurring payment and be done with it.

I would log into my online bank, add an automatic payment for every two weeks to the person's account number, and check the "mail me a paper receipt for the transaction" box. A few days after each payment, I'd get the receipt of the transfer from the bank in my mailbox.

Granted, I'd never actually check that box. The only realistic reason for a dispute would be that I did not pay or the recipient did not notice the incoming cash on their statement. Should that happen I can always log in and pull up the past

To write a cheque, I reach into my desk drawer, scribble on the paper, and hand it over. To get a money order, I need to physically go to a bank (or the post office), hand over cash to get the money order, AND pay a fee for the privilege. No thanks.

USAA has allowed customers to scan and electronically deposit checks for quite a while. The only new thing here is the iPhone app. Still, it's pretty cool, especially compared to mailing checks in. (For those who don't know, USAA doesn't have physical branches. They were established by and for members of the military, and they've pretty much always been pioneers of remote banking, first by mail and phone, and now over the internet.)

USAA (United Serviceman Automobile Association) is not your normal bank that has offices all over where you can make a deposit. It is a banking service available to military personnel and their dependents. It has always been set up so that servicemen deployed around the world can access their accounts. Before they wrote the iPhone app, members could scan their cheques and email them to the bank for credit, this is just an extension of that service, nothing new.

The name is United SERVICES Automobile Association. It is an inter-insurance exchange under Texas law.

The business is insurance and financial services for Army service personnel and their dependents. Army officer & NCO personnel are insured by USAA proper, enlisted, dependants, and other "associate members" by subsidiaries. So if you have to "have some sort of insurance from USAA" (itself) and "approximately 60% of USAA's customers qualify" it means you are a current or former US ar

Seems like any camera phone should be able to snap a picture of a check and send it to the appropriate online location. In any case, sounds like a whole lot of risk for something that, at least in my current situation, is not very common. The last time I deposited a check was months ago.

According to this wiki entry [wikipedia.org], Apple has roughly 10.7% of the market share of smartphones, while Symbian has 47%, Blackberry has 19.5%, Windows Mobile has 12.4%, and hell, even linux has almost 9%. So to say that the iPhone is is the single most popular is a bit of a stretch (even with the qualifier 'for personal use').

Arguing ease of development shouldn't really be a factor, because all they're really doing it saving a picture and sending it... it can't be that hard with any of the APIs (ridiculously ea

USAA already lets customers deposit checks by scanning them on their computers. Has for years. Very nice feature....if you have a scanner. Now that I'm only using a netbook, I don't have that luxury now.

USAA was also very quick to embrace the iPhone, and came out with a very nice dedicated app a while ago. In addition to letting you check balances, transfer funds and pay bills, it has a ATM locator (location based app), accident checklist with notepad, loan calculator, roadside assistance button (also l

USAA already lets customers deposit checks by scanning them on their computers. Has for years. Very nice feature....if you have a scanner. Now that I'm only using a netbook, I don't have that luxury now.

Take picture with cellphone.Email to yourself.Convert image to required format (jpg? pdf? tif?).Send to USAA.

Not sure if this would satisfy their requirements... But I've been doing this for docs when I'm on the road without access to a scanner for a few years now. It's a little sloppy (hard to get proper

I'm a USAA member, and I know for a fact that many USAA members have needs above and beyond a "normal bank" customer. Imagine trying to buy a new car in Florida when you are deployed to Iraq. Think of how difficult it is to have both of your signatures on one sheet of paper... its not a big example, but it is the kind of thing you run into.
Think about this, I once worked in an on-base video rental store - we had a guy rent a movie and then get orders that night to deploy... the computer just kept racking up late fees, even automatically reporting to his CO (also deployed) - we cleared it up after a month or two, once someone noticed.
Military situations are just plain different.

You deposit a check using this method
You lose the check (normally not a big deal)
Person contests every writing you the check
Now you can't prove the person wrote you a check

People lose things all the time. There are dishonest people who will try and welsh on funds they are supposed to pay. Couple that with the billions of transactions that happen on any given year and you get a recipe for some problems.

This new method should include the option/requirement to scan the check in.

The last two checks I wrote (and the only two in some time) were to municipal taxing authorities. The State finally got around to being able to do ACHs recently, and the IRS has been able to take your money that way for a while (as opposed to the more traditional way of sending goons over to take your kids' piggybanks).

Some companies (like my property management company) which really ought to be able to do better still take only paper checks. I enter the payment into my electronic bill paying application.

What would REALLY be a laugh would be if Apple deletes this app from the App Store. If they do that the way they normally do, it will be without explanation and without appeal. I'd like to see how it turns out if they try that against someone with clout like a bank.

I'd be interested to watch the progress. The Bank of America app flew right through apparently. Now only if theirs was more useful, I'd use it.

This concept isn't new - I'm a USAA member.. (USAA member ship is restricted to Armed Forces and their Dependants (used to be Only Officers int he Armed Forces)) From the start several years ago (8-9) when they opened the Banking part of USAA they allowed Check deposit via a Scanner or via Fax.

the idea of using an IPhone app is no big deal as it's a decent res camera.. and they already have the check image processing software in place (to handle the fax and scans)..

I've never used them for banking.. BUT for insurance.. they are by far the best i've ever seen

I'm a USAA member, and while it isn't some big technical feat of wizardry... I love being able to deposit checks from home. When first released it was Windows only, but they promised a Mac version "soon" and actually delivered on that promise in a timely manner.

They're one of the few businesses I can say I'm completely happy with. They actually still buy into the "quaint" principle that they exist to serve their customers.

Also a customer and agree that the Deposit@Home program they have is amazingly useful. I hate getting checks from people, but it is nice being able to deposit them from my desk in one minute.

Also agree that they are probably the least evil company in the banking world. I use them for nearly all of my services (banking/loans/insurance) and they always have the best rates and the best support.

Actually, scanning checks locally has been a feature for a number of people who accept checks for a number of years now, but hey why not take any opportunity to whine about Obama. No really, please do, as in the end your just betting against the American worker.

When I voted for Obama, I voted for change. Not the kind that jingles in the purse pocket of the 90 year old lady standing in front of me at the Piggly Wiggly searching for her checkbook in her handbag. I understand that we probably can't leave these grannies without their paper checks, but at some point, probably during the Obama administration, a bunch of them will die off. We should use that as an opportunity to do away with checks completely.

Electronic bank transfer is where it's at. Paperless society. Swipe and go at the grocery store.

Please Mr. Obama, implement real change. Get rid of checks.

you're aware that the US government can't abolish checks, right?

They don't have the Constitutional authority for the War on (some) Drugs (particularly the asset forfeiture laws) or the bank bailouts or the Federal Reserve or warrentless wiretaps or detaining citizens without charges and due process or collusion with ATT either. Those were stopped by a lack of authority, right?

They're not evading taxes, they're avoiding the service charge that Visa/Mastercard charges them on every transaction. In most businesses profit margins are very small, and the extra 5%-10% that the credit card companies skim off the transaction (particularly on small purchased) can eat up the entire profit.

Many businesses depend on cash customers because they make zero profit on credit card customers -- they just accept credit cards to increase their volume so to bring overall costs down, and hope and pray that they get enough cash customers to make a profit.

You know that "cash back" that credit card companies give you on each purchase? They're just giving you a cut of the money that they're wringing out of the merchant.

Keep Cheques. Get rid of Cash. Nothing erks me more that "cash only" establishments. If you are too cheap to buy a card reader than you should take my cheque.

There is some risk involved in taking a check. Assuming the piece of paper is in fact legitimate, one has no way of knowing if the account has enough funds or if the account is even open. There is much less risk when using cash or electronic payments.

Plus, retailers that want to reduce the risk of fraud will require customers to present valid governm

My guess is when the other guys calls his bank to complain, they call your bank, and then your bank asks you to present the check as proof. They then analyze the check for forgery and throw you in jail if they find any. Pretty similar to what they do to people who write in numbers on checks currently and try to change the value line.

"I wonder how much "reverse fraud" is possible with this? I take a picture of a $1000 check, and the person who wrote the check says 'hey, wait a minute! I only wrote that check for $100, the person who cashed it faked that image!'"

I'm confused, in your scenario who is committing the crime? I see problems either way. If it is the person who wrote the check, there is still an image of the check. So if the check says "One thousand dollars" on it, he's out of luck - he can't claim it said 100.

If it is the person who wrote the check, there is still an image of the check.

Right, but the person who wrote the check is claiming the image is faked. They can intentionally not keep a carbon copy, or better yet just make sure the last 0 doesn't go on the carbon copy. The only evidence the bank has of a check for $1,000 is an easily faked image submitted by the customer. Everything else says it was a check for $100.

I know that USAA in particular already has a system that lets users scan checks themselves with a PC and a scanner, and then can deposit the check via email or the website or what have you, simply by sending the image file to them.

So the only thing interesting here is really a) they're going to do it via an iPhone app, and b) the iPhone picture quality is now considered good enough for this sort of thing.

You need an account at USAA to make a deposit. You need to be in the military or one of their dependents to open an account. You can only deposit to that account with this app. It's not like there are a lot of holes to the process.

They are, if nothing else, extremely cautious about that sort of thing from my experience. I bank with them (as well as have my auto insurance through them). I wouldn't switch away for some imagined slight. Not after having dealt with the HELL that other banks put you through if there is some sort of customer service needed. USAA is by far and away the BEST customer service bank I have EVER dealt with. Bar none. Nope, I'm not switching banks.

I've been using their deposit@home service for a while now, and it's great. This is just a minor evolution of that (camera instead of scanner), and I don't see much to make me think it's a huge difference.

I used to implement systems that automated check imaging. The only thing on a check that is OCR'd is the MICR for the account/routing/check number, which was specifically developed to be machine readable. The handwriting for the check amount, even though it is semi-constrained, is not machine readable with any kind of accuracy. Those fields are split off and still entered manually by a human on the back end. The imaging software will do some wizz bang stuff like look for any lines or words written across

Unfortunately for the banks, many individuals and businesses still do business via paper checks.

Well, then the banks can make it easier and cheaper to do transfers between accounts. My fiancee and I live together, and every month she writes a check to me to help offset the bills and all that. I certainly don't want to trust Paypal (or pay their fees), so our options are to write a check or hand over several hundred in cash.

My fiancee and I live together, and every month she writes a check to me to help offset the bills and all that. I certainly don't want to trust Paypal (or pay their fees), so our options are to write a check or hand over several hundred in cash.

Been there, done that. We had an even simpler solution, she paid half the bills, I paid the other half. If you don't have enough bills to split the total evenly, get some more bills. Once we moved in together, more bills seems to appear naturally, like spontaneously generated, just like children.